Two more lawsuits filed to stop Whittier oil drilling; property tax group weighs in

WHITTIER - With two more lawsuits filed this month and a courthouse slowed by a new round of cutbacks, chances of a resolution to the controversial Whittier oil drilling project slipped away Thursday.

A hearing planned for today that could've decided the fate of two existing cases against the project was canceled when the judge handling the cases was promoted to an administrative position and her cases were left unassigned, said lawyers and officials familiar with the cases.

"We thought we were going to get something done," said a very disappointed Whittier City Councilman Bob Henderson. "Now we are back to square one."

Left in limbo was a suit filed in February by the Mountains Recreation and Conservation Authority (MRCA) as well as a petition to join the case from the Santa Monica Mountains Conservancy (SMMC), the state's largest nature conservancy. The SMMC is represented by state Attorney General Kamala Harris.

Earlier this month, two new cases were filed against the city of Whittier. A property owners group called Prop "A" Protective Association, LLC, calls the project illegal and city environmental reviews inadequate. The MRCA upped the ante by filing a preliminary injunction against the project, which tries to stop preparations cold for drilling on a 20-acre area within the Whittier Hills, adjacent to homes in the Friendly Hills section of Whittier.

Henderson said the city and its partners are obtaining the required mineral and air quality permits and that the project is not affected by the canceled court hearing or court challenges. He expects the first test wells to be drilled in February.

"We are waiting like everyone else. But we have a real interest here. If there is drilling there, our position is it damages the public interest. That's why we felt it was important enough to file a preliminary injunction," said Jeff Maloney, staff attorney with the MRCA.

The city of Whittier received $9.3 million from bond sales funded by taxes raised by 1992's Proposition A. The city used the money to buy more than 1,000 acres of the hillside preserve - the same preserve where it now wants to begin oil and gas production to boost sagging city coffers.

The environmental and property owner groups say the oil and gas project will violate Prop. A, which specifically directed taxpayer monies to be used for acquiring land for preservation, animal habitat restoration and social programs. The SMMC, MRCA and a lawsuit filed in October by the Los Angeles County Regional Park and Open Space District, the agency that administers Prop. A projects, say land purchased from the voter-approved measure should not be used for oil and gas production. Such a use violates the California Environmental Quality Act and Prop. A, they say.

The lawsuits ask for the same remedies, namely that the project be rejected. If the project is approved by the court, the entire county should share in the oil royalties, not just the city of Whittier, the plaintiffs contend.

Henderson said last month that the city will get 30 percent of the royalties from Matrix Oil Corp. and Clayton Williams Energy, Inc., the city's partners in the venture.

The city's share could equal as much as $1 billion over 10 years, city officials said.

Henderson has said in the past that the city is willing to negotiate a share of the royalties with the county. But those negotiations have not been fruitful, according to city officials.

In addition to lawsuits from the Westside environmental groups, an obscure property tax group filed a lawsuit on Dec. 12, becoming the fourth group with an active lawsuit against the project.

Very little is known about the group. Dennis Jebbia is listed as a member and a "resident taxpayer of Los Angeles County" on page 13 of the suit.

Jebbia, an attorney in San Marino, was suspended from practicing law for 18 months in 1998, according to the State Bar of California website. He was convicted of making false statements on three loan applications and submitted false tax returns, according to the State Bar of California. The website said no client was harmed, he cooperated with the bar's investigation and "took steps to demonstrate his remorse."

Jebbia, whose status is listed as active by the State Bar, was reached at his law offices on Huntington Drive in San Marino Thursday afternoon.

When asked about the lawsuit and the taxpayers group, he said: "I'm not going to comment, either. Have a good day."

The 28-page lawsuit filed by the Prop. "A" Protective Association claims the project violates CEQA, Prop. A and tax codes.

Most of the claims in the taxpayers suit are similar to those filed by the others - nearly word for word. However, the PAPA group says the city of Whittier will be placing county taxpayers in jeopardy because it is changing the use of land purchased with Prop. A funding from a nature preserve to a revenue-producing oil and gas project.

"PAPA and all other county property taxpayers are at risk of having larger assessments and greater financial liability imposed upon them for payment of bonds that no longer meet the Internal Revenue Code requirements for tax-exempt status," according to the lawsuit.

When asked to elaborate on the lawsuit, the group's attorney, Timothy Morris of Gianelli & Morris in Los Angeles, said by email: "No comment."

Whittier Hills Oil Watch President Roy McKee said he was not familiar with the PAPA group. However, he said the actions filed by the state attorney general and the county verify what his group and others opposed to the project have said for years.

"This is like our prophecy coming true. You can have a problem with the taxpayers," McKee said. "Now we have a taxpayer group that jumped on board."

The city is putting up a brave front, saying they are confident their project will be allowed to move forward. But the city is frustrated with the courts.

"I assume there will be a big status conference by whatever judge sorts this out," said James Markman, city of Whittier's attorney assigned to the case. "We are ready to litigate it. And we are ready to talk."